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BOEM - Bureau of Ocean Energy Management

10/15/2020 | Press release | Distributed by Public on 10/15/2020 08:00

Comment Period Opens for Proposed Offshore Financial Assurance Rule

Release Date
10/15/2020
Washington, DC
Contact(s)
Phone
(202) 709-0441

The Bureau of Ocean Energy Management (BOEM) and Bureau of Safety and Environmental Enforcement (BSEE) will begin taking public comment Friday on a proposed rule to clarify, streamline and provide greater transparency to financial assurance requirements (e.g. bonding) for the offshore oil and gas industry, while protecting American taxpayers against high-risk decommissioning liabilities.

With this rule, BOEM proposes to clarify and streamline the evaluation criteria BOEM would use to determine whether Outer Continental Shelf (OCS) lessees, right-of-use and easement grant holders, and pipeline right-of-way grant holders must provide additional security above the prescribed amount of base bonds to ensure compliance with their lease and grant obligations. BOEM also proposes to remove restrictive provisions for third-party guarantees and decommissioning accounts and allow the Regional Director to cancel bonds and third-party guarantees in certain circumstances not covered by the existing regulations.

BSEE proposes to revise the process for issuing decommissioning orders to predecessor lessees and grant holders when current lessees and grant holders fail to fulfill their decommissioning obligations for facilities on the OCS. BSEE would issue orders to predecessors in a reverse chronological order unless certain circumstances warrant pursuing all predecessors simultaneously. The proposed rule would also codify existing decommissioning practices for right-of-use and easement grant holders, and require that a party appealing any final decommissioning decision or order provide a surety bond to ensure that funding for decommissioning is available if the order is affirmed and the liable party then defaults.

How to Submit Comments

Once this rule is published in the Federal Register on October 16, 2020, the public will have 60 days to provide comments. The comment period will close on December 15, 2020. Details on how to comment may be found below:

Federal rulemaking portal:https://www.regulations.gov

  • In the entry entitled, 'Enter Keyword or ID,' enter BOEM-2018-0033 then click search.
  • Follow the instructions to submit public comments and view supporting and related materials available for this rulemaking.

Mail or delivery service:

Send comments on the BOEM portions of the proposed rule to:

The Department of the Interior
Bureau of Ocean Energy Management
Office of Policy, Regulation and Analysis
Attention: Peter Meffert
1849 C Street NW
Mailstop DM5238
Washington, DC 20240.

Send comments on the BSEE portions of the proposed rule to:

Department of the Interior
Bureau of Safety and Environmental Enforcement
Office of Offshore Regulatory Programs
Regulations and Standards Branch
Attention - Kelly Odom
45600 Woodland Rd
(Mail code VAE-ORP)
Sterling, VA 20166.

For more information on the proposed rule, please see: https://www.boem.gov/proposed-financial-assurance-rule